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Redundancy Payment and NES

Discussion in 'Employment Law Forum' started by Shan, 12 July 2014.

  1. Shan

    Shan Active Member

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    I was recently made redundant. I worked through my notice period. My EA has a stated minimum 12 weeks severance pay and my employer said that my pay through the notice period counts towards the minimum.

    The definition in the EA defines severance pay as:
    • salary in-lieu of notice in accordance with Clause 13.3, plus
    • three weeks salary for each completed year of service, plus
    • a pro-rata payment for each completed month of service in the final year of
      service
    The minimum sum payable shall not be less than 12 weeks’ payment.

    They are pointing at the following text to indicate they don't have to pay.

    13.3.2 'Payment in lieu of the prescribed notice in Sub-clause 13.3.1 must be made by employer only if the appropriate notice period is not required to be worked.'

    Am I right in saying it doesn't count towards the 12 weeks? (For me this is pretty clear but my employer has refused to listen and has paid me a severance pay of 6 weeks). I read the sentence above as it is up to the employer as to whether they want an employee to work the notice period. The other clauses in 13.3 detail the notice period and the lose of notice pay if employment is terminated during the notice period.

    Also in not paying any extra compensation for having worked the notice period are they in contravention of the National Employment Standards (NES)? I was told that under the NES you are due an extra two weeks if you work the notice period. (they have indicated that I am above the NES purely on the basis I am getting 6 weeks for 2 years). Is a comparison done on a total basis or on a entitlement by entitlement basis?

    As they are being exceptionally difficult and have proudly said they are doing this to everyone in that redundancy situation, I want to make sure they get their fair treatment which may involve fines (if they are the wrong side of the NES?)

    Any advice appreciated
     
  2. Owens Lawyers

    Owens Lawyers Well-Known Member

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    Shan what is the name of your EA and how long were you employed?
     
  3. Shan

    Shan Active Member

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    2 years - in Fin Services probably shouldn't share more than that online.
     
  4. Owens Lawyers

    Owens Lawyers Well-Known Member

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    Fair enough, although Enterprise Agreements are registered with the FWC and can be viewed by anyone online.

    Severance pay is not a term defined in the Fair Work Act as far as I can tell. The minimum you're entitled to is 2 weeks notice and 6 weeks redundancy. If they want you to work out the notice you must work out the notice. But it doesn't sound like you were given anything better than the NES.

    Of course your EA can give you greater (but not lesser) entitlements.
     
  5. Shan

    Shan Active Member

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    Thanks - does working out the notice period mean extra compensation under the NES?

    You are correct I didn't get better than the NES - but I am going to take to the ombudsman as I am under an award. and short 50% of what I was entitled to. Severence pay was defined in the award (and I presume this works like a contract). They have outright said to me they don't want to pay me for the same time twice. But once a 12 week min is in the agreement I figure that isn't a discussion to be had with me.

    There are other issues on hand so I don't want to mention co's.
     
  6. Owens Lawyers

    Owens Lawyers Well-Known Member

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    Hi Shan,

    I am not aware of any compensation for working out a notice period under the NES. Either you work the two week period, or you are paid equal to two weeks wages but don't work. There is nothing I'm aware of that says that you have to be compensated if your employer wants you to work out the notice period.

    If your EA says that you are to be paid a minimum 12 weeks severance pay and your employer only pays you six weeks for redundancy plus gives you two weeks notice, then I'd say you've got a complaint that the EA has been breached, and it would be worth taking it up with the Ombudsman.

    You say you are under an award but generally if a workplace has an Enterprise Agreement in place (which has to be approved by the FWC) the award no longer applies. In any event the EA operates like an award.
     

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